Savient and Teva came out the winners in a patent dispute that has been going on for a couple years now regarding human growth hormone. The District Court of the District of Delaware found Novo Nordisk's patent 5,633,352 invalid due on anticipation ground and unenforceable due to its inequitable conduct. The decisions can be found here , then click on "Opinions" and the matters of Novo Nordisk Pharmaceuticals v. Bio-Technology General Corp., et al. and Bio-Technology General Corp. v. Novo Nordisk A/S, et. al..
With a potential current market estimated at $500 million and growing, Novo Nordisk will likely try to appeal this decision. But a word or two about the inequitable conduct here ...
While findings of inequitable conduct aren't rare, they are fairly difficult to prove and are rather a slap in the face to the plaintiffs. "Inequitable conduct" is raised by defendants to patent infringment claims, saying that even if the defendant infringed the patent's claims, the patent owner (usually, plaintiff) engaged in inequitable conduct during the prosecution of the patent and materially mislead the PTO. In short, anyone prosecuting a patent has a duty of candor, good faith and honesty to the PTO during the prosecution of the patent. For a finding by the court of inequitable conduct, the defendant must show (by clear and convincing evidence) that 1) the omitted or false information was material to patentability of the invention, or 2) the applicant had knowledge of the existence and materiality of the information, and 3) the applicant intended to deceive the PTO.
Remember how when you were kids, and someone would suggest doing something that you thought was boring and it was "cool" to comeback with "let's not and say we did?" This case basically says "don't use that with the PTO."
Here, in a application upstream to the '352 patent, Novo Nordisk included an example that was written in the past tense, stating that a certain prosequence "was" expressed and evaluated, and that certain other steps "were" conducted and certain results "were" achieved. The court found that this example was material to the examiner's consideration of the upsteam patent applications's enablement requirement, and that as Novo did not inform the examiner that the cleavage and purification steps had not actually been performed, it could be inferred that Novo intended to deceive the PTO.
Unfortunately for Novo Nordisk, if inequitable conduct is found in just one claim, that renders the entire application or patent unenforceable, and that unenforceability goes downstream to all patents originating from the first unenforceable application. So, even though that one example went to Claim 1 of the upstream application, the '352 patent could be unenforceable.
What I always think is a shame in these cases is that the scientists really worked so hard to come up with certain innovations, just to see their work go up in flames (metaphorically). As a note, the court in BGT v. Novo Nordisk found that the scientist didn't really do anything (he'd helped write the example, but not with the intent of deception) - it was the company's subsequent actions in never telling the PTO that he example wasn't true that was the deception.
One thing I've never gotten a straight answer on is the remuneration to the scientist/employees in these situations. Obviously, their employment contracts will generally govern how they're paid and any bonuses they may receive for patents that are issued from work they author for the company. But what if the patent issues and then the court finds it invalid because of the conduct of others in the company (not the scientists)? I can see the scientist coming up with very valid arguments for why he/she should keep the money already given by the company, but wonder if some companies have been miserly enough to ask for the money back? Although some companies are good about going back and revising their comp packages for the scientists as caselaw develops and situations arise, and some are already really thorough with all the different permutations that may happen, there are many that don't think about the case when a patent issues and then is invalidated or unenforceable.
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